When I present seminars, I'm often invited by participants who are interested in learning how to make use of legal entities to get more than just business development, tax planning and protection from lawsuits. They're also interested in using them to safeguard privacy. We'll look at their use for just that reason.

A Separate Legal Person 

Because of their nature, their wide recognition by law and taxation legal entities are great ways to protect your privacy as well as ensuring the assets in a manner that is less visible and improves security of your personal and financial privacy. 

The first of my books on privacy, we looked at the increasing risk to Identity Theft and the frightening trend of theft and fraud occurring in America and looked at a variety of methods to stop it. Then, a few years later in my second book about privacy, we delved into the topic of legal entities being used as a method to protect assets in a manner which diverts attention from your personal life, decrease the risk of losses because of personal responsibility, as well as help you manage and improve your financial privacy. In this post I'd like to select three distinct legal entities with respect to privacy issues: 

Corporations

Limited Liability Companies

Triple LPs

What they share is that the are legally recognized entities that are recognized by states with the statutory protection. Each is an independent legal entity in relation to their owners. Each one of them has distinct identity and tax existence apart of their respective owners. Each one has been acknowledged not just by the law of the land, but by tax law too and are the subject of court hearings.

The corporation as well as the limited liability corporation as well as the restricted liability partnership have all been scrutinized separately regarding their use in business as well as asset protection functions In this article, we will analyze the three solely on the basis of privacy. 

Using a Low-Profile Corporation 

Corporations have been around for since the beginning of time. They are a result of the tradition that is part of English common law and are extensively used throughout the USA. A corporation is an artificial legal entity which is regarded as a separate legal entity apart from its proprietors. Like a natural person A corporation may have its own property, make agreements, hire and fire employees, maintain and open bank accounts, and use courts to seek legal remedies, and even defend itself and is legally able to carry out any action required to run an enterprise. 

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One benefit is that shareholder of a corporation (who are often referred to as stockholders, shareholders, or shareholders) generally are not personally responsible for the company's obligations and debts (except which the IRS could pursue the shareholders for tax debts that are not paid). Each for-profit company is created by being an 'C'-type corporation. It is taxed in a separate manner by its owner. A few of them choose to be taxed under the subchapter 'S in the Internal Revenue Code and are later taxed as pass through tax entities, which means the profits of their operations are taxed federally and are reported on the personal tax returns of their owners. In the latter half of the 20th century, employing 'S' companies was the default choice used by numerous advisors. In my article "The S Corporation is a Dinosaur and look at it in relation to the LLC. 

From a privacy standpoint From a privacy standpoint, a privately-held company (one which has not gone to the public) is certainly employed to lower your image. For instance when the company doesn't have your name associated the name (i.e. "The John Alfred Jones Corporation') but instead has the name of a trade name used by commercial companies (i.e. Green River Lending, Inc. .'), your individual identity isn't a neon sign that draws attention to your identity, and bringing awareness to your connection to the business. 

The corporate entity can own banks, vehicles, investment accounts, trademarks patents, copyrights, and other assets under its name, without your personal name or financial status being attributed to it. 

LLCs and Financial Privacy 

According to its legal status by its legal nature, it is legal to form a Limited Liability Company (or 'LLC') is an ownership structure that grants their owners (which are referred to as "Members") the benefit of limiting the personal liability they face as well as provide them with the benefits of taxation that are more comparable to partnerships, where the profits from the business are transferred to owners and taxed on tax returns of the owners instead of the LLC itself. 

An LLC is an legal entity that is not a person as a corporation. It may own bank accounts investment holdings, land offices, residence properties mutual funds, trading accounts for stocks options accounts and commodity trading accounts and intellectual property too including trademarks, copyrights, and patents. 

As they are held in under the names of an LLC Assets are more private. There is a lower chance that an Identity Thief will have access to accounts or assets by the LLC. This lets you have an unassuming appearance and also enhances your financial security as the ownership of an entity's asset will not directly reveal your personal information. This is one reason why celebrities as well as investors and other individuals who want to safeguard their privacy opt for the LLC. 

Private Triple LPs 

Each state has Limited Partnerships within their statutes. A limited partnership can be defined as an arrangement that permits the owners (called restricted partners) to have a lower personal liability for liability and debts that the company has. In the majority of states the general partners are subject to the option of assuming unlimited personal responsibility. But in a small number in states, the tendency is that general partners also have liability protection in an advanced variant of this form of entity known as"Liability Limited Partnership." Limited Liability Limited Partnership. 

The primary distinction between general and limited partners' roles has to do with day-to day management and decision-making authority. The general partners manage the company and makes daily decisions regarding investment and operations. The limited partners on other hand , are passive investorsand are not permitted to take business decisions. 

The more sophisticated version, that of the Limited Liability Limited Partnership (also called the 'LLLP' , or in my case as the Triple LP) gives the benefits of a lower liability to the general partner and also owns property in the same way that LLCs and corporations do. When the name of the partnership appears on the assets however, your name isn't. Since the partnership is the owner of investment accounts , such as a stock or an option trading account for instance it is less likely that an identity theft criminal might even be aware of the account or access to it. 

The issue is that, by not having knowledge of that account with a different name than yours , the possibility of unauthorized access by a person who manages to take your personal information is significantly less probable and you're much more protected than you'd be.